mdot prevailing wage compliance · non-compliance damages. 11 bohim 2009-07 ... • the contractor...

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MDOT Prevailing Wage Compliance

Introduction - MDOT Oversight / Labor Standards Statutes

Contract DocumentsWage Decisions

Wage Rate InterviewsCertified Payrolls

Truck DriversChris Roe – MDOTPrevailing Wage Compliance(517) [email protected]

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Labor Statutes• The Davis-Bacon Act (DBA)

• Davis-Bacon and Related Acts (DBRA)

– Fair Labor Standards Act (FLSA)

• Contract Work Hours and Safety Standards Act (CWHSSA)

• Copeland “Anti-Kickback” Act (CA)

Michigan Prevailing Wage Law

• Public Act 166 of 1965

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Prevailing Wage ExampleBase Hourly Rate + Fringe = Total Package

$22.00 $8.00 $30.00

The contractor can comply by paying: (29 CFR 5.31)1. $30.00 in wages

2. $22.00 plus, $5.00 in health insurance benefits, and $3.00 contributions in a 401k account

3. $19.00 plus $11 in 401k contributions or any other “bona fide” fringe benefit that would have a value of $11

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Truck Drivers

Chris Roe – MDOTPrevailing Wage Compliance(517) [email protected]

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BOHIM 2009-07Delinquent Notice procedure (pg 8 of 25)

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BOHIM 2009-07Delinquent Notification Example

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Required Certified Payroll Info(more in the Certified Payroll module)

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BOHIM 2009-07Deficient Notice procedure (pg 13 of 25)

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BOHIM 2009-07Deficient Notification Example

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BOHIM 2009-07Non-Compliance Damages

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BOHIM 2009-07Restitution Notice procedure

Drafting the “Prevailing Wage Noncompliance Violation” letter

• Explain the noncompliant violation.

• Explain what is expected of the Contractor.– Pay restitution as outlined– Provide detailed documentation that supports their certified payroll– Combination of the above

• Detail what will happen if the violation is not corrected.– Explain the intent of the notice

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• If restitution is required in a prevailing wage violation, the C&T Divisions prevailing wage compliance specialist is to be notified.

• The prime contractor will be notified along with any involved subcontractor of the violation and restitution amount.

• Intent of the first notice of violation and restitution.– Immediately withhold the amount of the violation, if known.– 60 days to resolve the violation or the intent will be to

withhold payment for the offending contractor’s items.

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Intent of the second notice of violation and restitution.

• Begin to withhold payment for the offending contractor’s items.

• If not resolved with in 30 days of the second notice, NON-COMPLIANT DAMAGES will be accessed back to the date of the first notice. The damages will continue until the violation is resolved.

• The contractor is also responsible for any and all cost associated with the investigation and audit procedures.

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FHWA – 1273

• The Form FHWA-1273: Is a convenient collection of contract provisions and proposal notices that are required by regulations of various federal agencies including the FHWA

– Required by FHWA to placed into federal aid contracts

– Located at the back of every proposal

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FHWA-1273

Page 1

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FHWA-1273

Section IVPage 3

1. General:

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FHWA-1273

Section IVPage 4

1. General:

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FHWA-1273

Section IVPage 4

4. ApprenticeTrainees and Helpers

a. Apprentices

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FHWA-1273

Section VPage 6

Statements and Payrolls

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FHWA-1273

Section VPage 6

2. Payroll and Payroll Records

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STATE DBRA

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Contract Documents

Wage DecisionsWage Rate Interviews

Certified PayrollsTruck Drivers


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Highway (MI7)Wage determinationClassifications

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Typical Roadway Section

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Common WrongClassifications used for Roadway & Bridge Construction

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Common WrongClassifications used for Roadway & Bridge Construction

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Truck Drivers


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Form 1156-T1

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Wage Rate Interview

• The interviewer will complete form 1156-T1, NOT the worker.

• Interview at least one worker in each classification represented for each contractor on the project during each construction season..

• To ensure privacy of workers, coworkers and supervisors (foreman) are NOT allowed to be present during the interview.

• Conduct interviews in the early stages of the project to verify prevailing wage compliance.

• Check the certified payroll against the wage rate interview in a timely manner so the issues can be resolved in a timely manner.

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Wage Rate Interviewform 1156-T1

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Wage Rate Interview(WRI)

form 1156-T2

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Wage Rate Interviews

Certified PayrollsTruck Drivers


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1955 Contractor Reportfilled out by the prime contractor when submitting sub contractor

certified payrolls

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CP-347 example “icons”

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CP-347 Instructions

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Certified PayrollsApprentice / OJT

• Certified payrolls are required to include the identification of trainees and apprentices and the program levels

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Certified Payrolls“Owners”

Contract Ownership may qualify for exempt status of paying prevailing wages by using the “Ownership Test”.

• They are at least 20% EQUITY owner, and

• They are actively engaged in the management of the enterprise.

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Truck DriversChris Roe – MDOTPrevailing Wage Compliance(517) 202-3716

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Example of DBRATruck Driver Fringe Benefit Calculation

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Truck Drivers –Covered by

State Prevailing Wage Law

• IN GENERAL, when a driver is performing work for the sole intended purpose of the covered project, all time spent is covered under state prevailing wage laws.

• NOTE: THE DE MINIMIS TIME DOES NOT APPLY

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Truck Drivers –NOT Covered by

State Prevailing Wage Law• A driver employed by a material supplier, not by the

contractor, to deliver materials to a project site and who performs no other work on the project is not covered.

• Additional Understanding: If the material supplier does not own their own trucks and utilizes broker trucking to deliver their product to the job site and this broker truck has no contractual relationship with an onsite contractor or subcontractor the driver of such trucks are not covered.

• Owner/Operators are not covered